The government has decided to curtail current expenditure besides holding current development projects so far not initiated under PSDP-2008 for the next fiscal year. The arrangement has been made to bring down the budgetary deficit to four percent of the GDP as targeted in the current fiscal year budget.
Advisor and Special Secretary to Finance Ministry Dr Ashfaq Hassan Khan told Business Recorder on Tuesday that President Pervez Musharraf had already approved the new saving arrangements to offset pressure on the economy. He said rising oil prices and subsequently huge subsidy incurred on providing subsidised oil has forced the government to take some extraordinary steps to keep budget deficit within targetted limit.
He added that the concept of cut in PSDP size of the current fiscal year was not the right term for the new arrangements introduced to offset pressure on the economy. Rather it is some kind of management to keep the ongoing developmental projects on track and at the same time save some money by delaying those projects which were not started in the first eight months of the current year.
Dr Ashfaq Hasan Khan maintained that the president was given a full presentation on the economy and the rising pressure on it due to subsidies given to subsidise oil prices, fertilisers and import of wheat. It resulted in strong feeling at the highest level that there was no harm in delaying those developmental projects for the next fiscal year, which were yet to be started in current fiscal year.
He said as per decision, planning commission will identify the development projects for deferment to next fiscal year and divert their allocations for financing the subsidies on oil, wheat and fertiliser. Planning Commission had given a detailed presentation to the president on PSDP utilisation and allocation for different development projects.
The President gave the directions on PSDP during Planning Commission Deputy Chairman; Dr Akram Shaikh's two and a half hour long presentation here. Sources said that the President showed satisfaction over PSDP overall utilisation and pace of the work of the developmental projects.